Australian insurer IAG has signed an agreement to acquire motor underwriter and broker Equity Insurance Group. The deal is estimated to be worth £570m.
In a statement to the Australian stock exchange, IAG has requested a halt in trading for two days to allow the deal to go through.
The statement said: “The trading halt is necessary as IAG has signed an agreement to acquire leading UK motor underwriter and broker, Equity Insurance Group and will be
undertaking an institutional placement…We request that the trading halt be in place for two trading days.”
Equity now joins IAG's growing UK presence, which currently comprises Hastings and Advantage, the acquisition of which was announced in September 2006.
This is the latest chapter in the Equity tale, after its chief executive Neil Utley successfully bought back the company last year for £270m. Since his return, Utley has acquired a number of brokers and won major affinity deals with corporate clients such as First Direct, Ryanair and Renault.
Sources said Utley's decision to sell was not a surprise due to the deal he struck with venture capitalists Englefield Capital and Duke Street Capital, which bankrolled the original deal. Equity's financial backers had made it clear that an exit strategy was needed within three years.
It is understood Utley and his management team will remain with the company.
IAG is listed on the Australian Stock Exchange with a market capitalisation of around A$9bn (£3.57bn), and receives annual gross written premium of more than A$6.4 bn (£2.54 bn).
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